Onida, the famous ?Neighbour?s envy, owner?s pride? brand of colour televisions recently started hawking mobile phones. The country?s largest consumer ?expendables? maker, Hindustan Unilever, is gung-ho over a ?durable? product in Pureit water purifier. And so is Tata Chemicals, again an expendables, chemicals and fertiliser maker, with Swach. And two of the country?s largest durable brands, LG and Videocon, are launching power inverters for homes, a market dominated by start-ups like Su-Kam and Luminous.
Are all these marketers just being opportunists, with no care for their core competence? After all, Mirc Electronics, the company that markets Onida, has all its life only sold televisions and washing machines, and one can argue about its competence in a category dominated by deep-pocketed global behemoths like Nokia, Sony Ericsson, Apple or Blackberry. Or for that matter, some may ask whether a global brand like LG is diminishing its glow by getting into inverters, till yesterday an infra-dig category unworthy of attention of any big global electronics player?
This correspondent holds no brief for any marketer, nor is privy to goings-on in these companies? boardrooms before they took these plunges. And it?s anyone?s guess whether their recent moves will bear fruit or not. But if history is any indication, it helps marketing thinking not to remain hostage to conventional brand or management wisdom.
Just step back to the mid-1990s, the time when Tata Motors was still unveiling plans for India?s first indigenous car, the Indica, and the now much celebrated Tata Nano was still an unborn idea. Not many people gave the company half a chance to be a long-term, big carmaker even for the Indian market, let alone become a serious global auto player and owner of marquees like Jaguar and Land Rover.
Conventional wisdom at that time had it that auto, and specially cars, was a ?global industry?, and the ultimate dominance of the then vibrant Detroit, Stuttgart, and the Japanese in the Indian car mart was a foregone conclusion.
Though no one said it in so many words, the general impression was that the locals were merely trying to build an attractive arbitrage value before the inevitable happened??global auto biggies gobble them up. That script didn?t play out to plan, yes, partly because carmakers in India, including the global ones here and their suppliers, turned over a new manufacturing leaf??global quality at competitive prices?but more importantly, and this gets missed amidst all the celebration, is that marketers like Tata Motors remained steadfast in their belief that their deep knowledge of the Indian consumer and the market can be a competitive edge, globally. For the rest, even product or service competence, can be built or acquired.
And they have been proved right. For Nano is as much a marvel of low-cost engineering as Tata Motors? chairman Ratan Tata?s vision for a Rs 1-lakh people?s car. Tata Motors? understanding that India is ready, in fact needs such a product, preceded any design or manufacturing blueprint. So even while Nano prepares to go global, and talk of it becoming the largest selling car model worldwide in the next decade gathers pace, it helps to remember that it all started with the deep ?consumer insight??a pricing one. Technology, sourcing and manufacturing all were tweaked and/or re-invented to deliver to this ?insight?.
Marketers like to fish where the fish are. So naturally, many are now looking at low value, high volumes that the oft repeated bottom-of-the-pyramid market in India, with over 300 million consumers, offers. So if there is a huge opportunity to sell millions of water purification appliances, it is nobody?s case that only existing players reap this windfall!
A big consumer goods marketer, much like HUL or Tata Chemicals, with over decades of experience in handling a complex and well spread out distribution network, coupled with a thorough understanding of Indian consumers? price-value equation can bring a paradigm shift in the category, much like Nano in cars. Tata?s Swach and HUL?s Pureit are offering not just low prices, but also a promise of a potable glass of water even when there is no running tap water or power?and that itself converts an endemic civic problem into a huge business opportunity across urban and rural areas.
If LG and Videocon think that their brand equity can be extended to cater to the growing market for inverters or Onida for cell phones for that matter, all power to them. After all, imagine if Nokia had decided to stick to its paper mill origins!
A $1.3-trillion Indian economy, growing on a trot, with a predominant share of domestic consumption and a large part of its populace still to get into ?consumption mode? offers a sumptuous spread for the brave marketer who is not afraid to venture out of his traditional ?competence? comfort zone.
